A Didi logo is seen at the headquarters of Didi Chuxing in Beijing on November 20, 2020.

Didi slipped on news that China is considering serious penalties for the firm following its US IPO.S
Shares of Didi fell 7.3 % after the open on Thursday.
Disciplinary measures could include forcing the company to delist or withdraw its US shares, Bloomberg reported.

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Shares of Chinese ride-hailing giant Didi slipped on Thursday on news that regulators in China are considering serious penalties for the company following its blockbuster IPO in the US.

Didi shares were down 7.3 % as of 9:31 a.m. ET Thursday.

Regulators were looking at a range of penalties to impose from suspending certain operations to introducing a state-owned investor, Bloomberg reported. Among the harsher measures would be to force the company to delist or withdraw its US shares, sources told Bloomberg.

The company has been under heightened scrutiny from Beijing after the ride-hailing firm decided to push through with going public on June 30 despite an investigation from the Cyberspace Administration of China about its data security practices earlier this year.

The CAC said it found that the Didi app “has serious violations of laws and regulations” in collecting and using personal information. App stores were then notified to remove Didi and “strictly follow the legal requirements.”

Didi’s June 30 New York Stock Exchange debut was the second-largest among Chinese companies after e-commerce giant Alibaba’s IPO in 2014.

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Shares of Didi, the second-largest ride-hailing app by market capitalization in the world, soared as much as 28% at its public trading debut.

Following its US listing, Chinese regulators on July 6 said they will tighten control of domestic firms seeking IPOs overseas.

More specifically, they said they will ramp up the regulation of cross-border data flow, tighten measures on illegal activities in the securities market, and check the sources of funding for securities investments, among others.

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Source:: Business Insider

      

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